remilk holds its decision to set up largest precision lab denmark dairynews7x7

Israeli startup Remilk—one of the best-funded players in the nascent animal-free dairy space—has hit pause on plans to build a large-scale precision fermentation facility in Denmark and is instead ramping up production of whey protein (made by microbes, not cows) with a contract manufacturer in western Europe, which it claims will enable it to hit production goals more rapidly.

Armed with $120 million raised in a Series B round led by Hanaco Ventures, Remilk unveiled plans to build what it claimed would be the world’s largest precision fermentation facility on a 750,000sq ft greenfield site in Kalundborg, Denmark, in April 2022, with the aim of breaking ground by the end of the year.

World’s largest precision fermentation facility

At the time, the startup said building its own plant at Kalundborg made economic and environmental sense, as it would become part of the Symbiosis Project, a group of companies seeking to build a circular economy where “byproducts of one company become resources for another.”

It would also enable Remilk to create a tailor-made facility optimized for its process, head of business development Jason Rosenberg told FoodNavigator-USA last year. “While we rely on existing infrastructure around the globe, most of it was built for a high value, low volume matrix with specific controls for the pharmaceutical industry that are different than what’s necessary for the food industry. ​

Also Read : World’s largest precision fermentation facility to be set up by Remilk

“While we and the companies around us in our industry utilize those assets to produce today through contract manufacturing and co-production partnerships, in the long term, we need very large-scale tailor-made food grade facilities established for this purpose alone,” added Rosenberg, who was still telling reporters in November 2022 that Remilk planned to break ground at Kalundborg by the end of the year.

However, it has now put those plans on hold, AFN has learned.

Kalundborg site on hold, but ‘still at the heart of our mission’

“We were able to identify and secure significant production capacity at an existing Western European facility and have already started producing there at significant scale… it enables us to reach production goals at a faster pace than anticipated,” head of communications Shlomit DeLouya Solomon, told AFN. “Securing significant production capacity led to our decision to delay the Danish facility’s construction to a later stage in our growth, though it is still at the heart of our vision, and its state-of-the-art engineering plan is ready for implementation as soon as we decide to launch our own production capabilities.”

CMO facility ‘can expand our capacity very significantly, with a fraction of the capital investment, with a shorter timeline’

Speaking to AFN at the Fermentation-Enabled Alternative Protein event in San Francisco last week, Rosenberg said: “The reason we set out to build our own facility was because we believed it was the only way to reach the scale we need to reach.

“But our mindset has changed over the last several months… this facility we’re currently producing at in Europe can expand our capacity very significantly, with a fraction of the capital investment, with a shorter timeline, and it’s de-risked because they are already operating with our process, so we can expand to comparable capacity [as that planned in Denmark] at an existing facility.”

‘There is no steel in the ground as of now’

So what does this mean for the project in Kalundborg?

According to Rosenberg: “It’s on hold, and we’re going to assess this again towards the end of the year.”

Also Read : Don’t underestimate the power of a microbe: Precision Fermentation

But he added: “We still firmly believe that the site has the potential to produce very large quantities of animal-free dairy proteins in an extremely sustainable way because of the circular economy, primarily for the utilization of some of our waste streams and for the utilities [heat and steam to power neighboring facilities].”

‘Even any sunken costs are very strongly offset by the cost saving in converting an existing facility’

He would not comment on orders already placed for fermentation vessels or other equipment at Kalundborg, but added: “The majority of the expenses that have gone into the site are on engineering work, which is relevant for that facility in the future as well as facilities on other plots or for the expansion of the current [CMO] facility, where some of the work can be copied and pasted.

“There is no steel in the ground as of now.”

Asked if Remilk lacked funds to finance the facility, he said: “Not by any means. We now have the option to produce comparable amounts of protein, de-risked sooner, at a fraction of the cost, so even if we had 10 times the money we currently have, we wouldn’t just burn it.  [Scaling up with the partner in western Europe] wasn’t an option when we selected the site in Denmark to build our own facility, so we’re extremely pleased to have learned that it can now be done.

“Even any sunken costs are very strongly offset by the cost saving in converting an existing facility.”

As to what had changed in the last couple of months to prompt the pivot, he said: “It wasn’t a case of capacity suddenly freeing up. It takes time to build trust and confidence two ways, both our confidence in the facility and its owners’ confidence in us, in our process, and in what the market wants.”

Aligning with large CPG companies

Remilk has engineered a strain of yeast (Komagataella phaffi) which it claims can utilize an “extremely widely available carbon source which is not agricultural and is very cheap.”

It has notified the FDA of its GRAS determination​ ​and is awaiting a ‘no questions’ letter, said Rosenberg, who said Remilk is also working through the regulatory process in Israel and Europe.

Remilk is currently supplying General Mills with whey for its Bold Cultr animal-free cream cheese, which is being test marketed online and in a handful of stores in the US, and it has a strategy of “aligning with large CPG companies,” said Rosenberg.

“I’m talking about companies that are both active and leaders in the categories we see as the most relevant for our ingredients in the very near future, so primarily beverages, yogurts, soft spreadable cheeses, and ice cream.

“Some of them intend to launch in multiple categories at once, while others are directed at a very specific product category to test there before potentially expanding to other categories as well.”

What is animal-free dairy?​

There is no formal definition of ‘animal-free’ dairy—a term being tested by some startups in the space—but it typically refers to products made with ‘real’ dairy ingredients such as whey and casein proteins that are produced without cows, either via genetically engineered microbes or genetically engineered crops such as soybeans, corn, or peas.

Using synthetic biology, firms in this space use DNA sequences like pieces of computer code to program or instruct plants or organisms such as fungi and yeast to express animal proteins.

Making dairy products without cows, argue animal-free dairy advocates, offers the best of both worlds: more sustainable and ethical products that don’t involve industrialized animal agriculture, but still deliver the nutrition and functionality of ‘real’ dairy such as melty, stretchy cheese, which is hard to make with plant proteins.

California-based Perfect Day is the most advanced player in the field, producing whey protein from multiple sites that supply emerging CPG brands to large CPG companies including Mars (CO2COA) and Nestlé (Cowabunga), who are testing the waters with various products and concepts.

Other startups include Remilk and Imagindairy in Israel; Change Foods and New Culture in the US;  All G Foods in Australia; Formo in Germany; Those Vegan Cowboys in Belgium; Daisy Lab in New Zealand and so-called ‘molecular farming’ players such as Nobell Foods (an AgFunder portfolio company), Pigmentum, IngredientWerks, Mozza, and Miruku.

Source : Agfundernews Feb 9th 2023 by Elaine watson

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